KUALA LUMPUR, Sept 19 — Asian currencies, including the ringgit, are expected to trend upwards next week, with the local note moving towards the 4.10 psychological level next week.
FXTM market analyst Han Tan said that China’s better-than-expected economic data, which pointed to a broader-based recovery, would bolster sentiment surrounding Asian currencies.
“While the ringgit has reached its strongest levels against the US dollar since February, the ringgit’s year-to-date gain is now less than one per cent,” he told Bernama.
He added that this was also driven by the weakening of the greenback which suggested a less dovish outlook for the economic powerhouse.
“With a weaker dollar set to be relied on to boost US inflationary pressures, in keeping with the Federal Reserve’s new stance, that could allow Asian currencies to carve out more gains in the weeks ahead,” he said.
Tan noted that the FTSE Russell’s decision on whether to keep Malaysian bonds in its World Government Bond Index, which is expected in the coming week, could have a major bearing on sentiment surrounding onshore assets.
“Should Malaysian bonds be kept on the watchlist, that could push back concerns over potential capital outflows while allowing the ringgit to explore more of its upside against the US dollar in the interim,” he said.
On a Friday-to-Friday basis, the ringgit eased against the US dollar to 4.1100/1150 from 4.1510/1550 in the previous week.
The ringgit traded higher against the Singapore dollar to 3.0299/0347 from 3.0384/0420 last Friday but fell versus the yen to 3.9398/9450 from 3.9076/9124 previously.
The local unit slipped vis-a-vis the British pound to 5.3340/3421 from 5.3104/3167 but climbed against the euro to 4.8712/8787 from 4.9281/9332.